Thor Mining upbeat on Nevada tungsten project after price rally

The Pilot Mountain Tungsten Project (Image courtesy of Thor Mining PLC)

LONDON, Oct 11 (Reuters) – Thor Mining hopes to capitalise on a 50 percent rise in tungsten prices to nurture a discovery in the U.S. state of Nevada and bring online a more advanced project in Australia, its chairman said.

Tungsten, used to strengthen steel, last shot to prominence in 2012 when prices hit $54 a kilogram.

After falling to less than half that during the commodity price crash of 2015-16, the price has rallied by around 50 percent this year to nearly $40 a kilogram. <TUN-FERRO-LON>

Mick Billing, executive chairman of Thor Mining, said the Pilot Mountain tungsten project in Nevada was going to be “quite a monster,” with five-to-ten years life as a low-cost open pit and at least 15-year underground life after that.

On the basis of drilling results published this week, he said it could produce an estimated 1,000 tonnes per year, or 1 percent of the world’s tungsten market, and at today’s prices would be worth around $1.4 billion.

Thor also has assets in Australia, where it owns the advanced Molyhil tungsten project in the Northern Territory, which Billing said could be brought online within a year of financing being raised, although he did not specify when that would be.

Billing linked the tungsten price rise to depletion of scrap piles in Europe and the closure of Chinese production as the country brings in new environmental standards.

Even if the rally falters, Thor, he said, would be sheltered by low production costs, especially in Nevada.

Costs at the Australian project are estimated at between $10 and $11 per kilo, taking into account the costs of providing a power source and flying miners into a remote area.

At Pilot Mountain, where the company would not face such expenses, costs would be closer to $8 per kilo.

(Reporting by Barbara Lewis; Editing by Mark Potter)